Despite tech job cuts – it’s not as bad as it used to be

First quarter technology job cuts were nearly five times higher than the 17,345 cuts announced last year during the same period.

Challenger, Gray & Christmas Inc. released a report today stating that planned job cuts in the United States tech sector totaled 84,217, up 27 percent from 66,312 during the previous quarter.

However, during the dot-com collapse, nearly 1.2 million tech jobs were cut during 2001 and 2002, an average of 145,467 job cuts each quarter.

Duncan Stewart, CEO and president of the Colorado Springs Technology Incubator, said that although the tech sector is cutting jobs, it can help in the long run. The United States tends “to do layoffs quickly – pull the Band-Aid off and get it over with,” Stewart said.
Lee Brown, vice president of business development at Ramtron International Corp., headquartered in Colorado Springs, said the company had to recalibrate its expense structure last month, to pay for strategic initiatives.
“In order to navigate the current environment, we had to restructure and make cost reductions,” he said. The company reduced its work force by 17 percent last month and also reduced salaries 5 percent to 12 percent for all employees.
Brown said that the consensus from an industry perspective is that the second half of 2009 will be stronger, from a sales standpoint, than the first half.
“A lot of the first-half difficulties are the result of an imbalance in inventory in the supply chain,” he said. “Inventory has to adjust.”

And technology is currently in the middle of that lag time.
“When it adjusts, we’ll return to a traditional level of ordering that’s based on consumption, rather than inventory,” Brown said.
European and Asian economies are dominated by larger companies, which are less flexible in handling economic downturns, Stewart said.

A majority of Americans work for small to mid-size companies.
And locally, a lot of our technology is government sales, so our region is more stable than others.
“It’s fairly common during a downturn for technology to lead it (economy) down and lag it out,” Stewart said. “But we also see an uptick in start-up tech companies, and we’re definitely seeing that. There’s been so much pent up demand in Colorado Springs.”